26/03/2008 - 22:00

Merger focus on Ivory Coast

26/03/2008 - 22:00

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The Equigold’s plans to expand its established position.

Merger focus on Ivory Coast

The agreed merger between Perth-based gold miner, Equigold NL, and Australia’s second largest gold producer, Lihir Gold Ltd, has focused investor attention on Equigold’s plans to expand its established position in the potentially prosperous, yet recently volatile nation of Ivory Coast.

Equigold has an interest in some of the region’s most prospective territory after it took advantage of mining regulations introduced in the West African nation in 1996.

Its exploration activity has led to the planned start of commercial production at its $65 million Bonikro mine by the end of July this year.

Equigold managing director Mark Clark said the $1.1 billion merger with Lihir and the production in Ivory Coast would consolidate a strong position in the future.

“As a large player in that area of the world, we think it gives us fantastic opportunity to continue to grow the company both through exploration and through merger and acquisition opportunities,” he said.

Lihir managing director Arthur Hood has highlighted the potential of combining Lihir’s financial strength with Equigold’s land holdings, which include exploration leases over 15,000 square kilometres (granted or under application) in the region’s greenstone belt.

“In the Ivory Coast they have a great land package and exploration package and it will also allow us to diversify production away from Papua New Guinea,” Mr Hood said recently on Sky News.

While Equigold and Lihir are confident about the future of Ivory Coast, the nation remains divided between rebel groups in the north and the government in the south following a 2002 coup attempt.

“I feel very comfortable with the political situation in Ivory Coast,” Mr Hood said.

“It has a very strong oil and gas industry, a strong economy and stable bureaucracy.” The former French colony, which gained independence in 1960, experienced conflicts in 2002, with those in the north accusing the government of discrimination against the Muslim and foreign communites.

This led to the creation of a buffer zone, with UN and French peace keepers separating the two forces.

A recent peace accord, signed by both parties, has been seen as a sign that unity may return to the area, with presidential elections aiming to be held in early 2009.

In spite of recent political problems, Ivory Coast still boasts one of the strongest economies in West Africa.

Traditionally based on the production of cocoa, producing more than 40 per cent of the world’s supply, mining activity has increased in recent years, with Equigold joining fellow Western Australian company Perseus Mining Ltd in the area.

Perseus, which listed on the Australian Securities Exchange in September 2004, has an 80 per cent interest in the Tengrela gold project, which lies within the renowned greenstone belt of Ivory Coast.

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